Technological development in the 21st century has both created and destroyed jobs on a global scale. However, the rise of automation through technology alone is just one factor that contributes to job loss. Since the beginning of time humans have developed technologies in order to make life easier. For example, the wheel made the transportation of people and things faster and more convenient than by walking. Yet, the wheel did not replace the need or ability to walk, rather it provided an opportunity for people to utilize and build off of.
Today, machines automate many processes that low-skilled workers used to perform but they also create new job opportunities for machine operators, engineers, computer programmers, and similar professions. One major reason why low-skilled workers are losing their jobs to machines and cannot find work is because the ‘new’ jobs that are being created by technology usually require a higher set of skills, or education, instead of relying solely on physical labor. Low-skilled workers who do not learn these ‘new’ skills often times find themselves out of work with few opportunities for reemployment in the same field. This is referred to as skill-biased technological change.
Technology creates winners and losers across many job sectors and is not just limited to the manufacturing industry. Artificial intelligence (AI) is also replacing many white collar jobs as well. Professionals such as accountants, lawyers, real estate agents, and bankers are a few to name who are being adversely affected by computer automation. Software like TurboTax is slowly replacing the need for accountants, LegalZoom is slowly replacing the need for some attorneys, websites like Trulia and Zillow are replacing the need for real estate agents, and online banking is slowly replacing the need for tellers and branch banks. On the other hand, jobs such as cyber security professionals, web developers, computer programmers, computer engineers, and computer systems analysts are all being created by having AI. AI also creates business opportunities for internet entrepreneurs and companies as well. Robots of all kinds will continue to restructure the workforce in the future.
Globalization, education, high labor costs, the decline of labor unions, politics, and immigration are a few additional reasons why job loss in America is occurring beyond skill-biased technological change. It is important to note that there is overlap between many of the variables that factor into job loss which also must be considered. For example, companies in the United States are able to exploit cheap labor from other countries such as China, India, Mexico, Thailand, and many others. The reason they are able to exploit the cheap labor is because the laws in those countries don’t protect laborers in the same way the United States does for its citizens, which is why the minimum wage and unions were created in the first place.
More and more factories are turing to the latest developments in manufacturing automation not so they they can cut manufacturing jobs, but tostay competitive. Lower wages overseas makes it difficult for U.S. companies to carry a large payroll due to higher American wages. Automation may be killing some low-skilled assembly line jobs and the like, but it optimizes production costs to help bring down the cost of manufactured goods. This allows American manufacturers to stay competitive with lower cost Chinese and other foreign goods.
In the years to come we can expect to see an increasing number of jobs that are lost to automation but we will also see many new jobs that are created as a result of it. 50+ years ago people had the ability to finish high school and go right to work where they could support a family and be financially secure. For many, that is no longer an option today because of the reasons mentioned before. In the future, many low-skilled and uneducated laborers, as well as those who will be structurally unemployed, will be negatively impacted by these economic changes. As technology advances there will be an increased demand for quantitative-related education such as in the fields of engineering, computer science, economics, physics, and mathematics.
